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@MatP and @MattW:

Thank you for clarifying. This sheds more light into the exact nature of MPowa's offering. 

Plastic dongle based card readers for mobile phones have been around before Square. Their suppliers left it to the merchant to sign up directly for a merchant account with any acquirer bank. Square rightly recognized this to be a major pain area - to which I can attest from my personal experience. It disrupted the status quo by signing up for a merchant account in its own name and provided individual merchants with a sort of "sub-merchant-account" whereby the merchant does not have to sign up for a merchant account in its own name but can still accept card payments via Square's merchant account. And do this for a single uniform fee of 2.75% regardless of the acquiring bank, merchandise category, etc. 

Exclusion of merchant fees is a strong indication that MPowa is just another dongle provider and not a Square-equivalent at all. 

"...with mPowa taking 0.25% per transaction." Assuming this figure is not a typo - with the likes of Square charging 11X more at 2.75% - mPowa is a much cheaper option for merchants wishing to accept card payments. 

The real challenge is for banks to be able to think of adequate number of use cases for deploying various existing technologies. For example, it is technically feasible to make a geofenced offer for a checking account on the smartphone of a potential customer walking past the bank branch. But such an offer has limited scale since checking accounts - unlike books, DVDs or sandwiches - are not bought and sold everyday.

On the other hand, stock trading is a great usage scenario for mobile phones and several banks already offer this product.

Mobile payments could be another strong use case for mobile but banks might be thinking that they're doing the smart thing by ceding the m-wallet market to third-party providers. It's quite likely that a typical customer might prefer to store details of their cards issued by Bank X, Bank Y and Bank Z in Google Wallet, ISIS or some other independent m-wallet provider than in the one provided by their bank (if any). As long as the payment eventually happens on the card network rails - as it does with almost all m-wallets today - banks X, Y and Z earn no less interchange revenue than if they'd incurred the cost of providing the m-wallet. While it's difficult to predict the long-term repercussion of their approach, banks' reluctance to jump into m-wallets or mobile payments seems justified from the perspective of topline and bottomline in the short term. 

@BrettK: I never quite understood SOPA and least of all, never thought it had such far reaching impact on banking. Props for this excellent post that throws light on both points. SOPA does sound increasingly draconian now. 

Nice app. Kudos to ICICI Bank. Curiosity got the better of security concerns and I signed up immediately. I'm sure ICICI will use this app as one more channel to target ads at me. But I'm not half as sure about why I'd want to use it after this first time. After all, I've being checking account balances and doing other things on ICICI Bank's Internet Banking website for 10+ years and I don't find any compelling reason to start doing such things on Facebook. But, I'm sure a lot of GenY customers will find enough reasons to do all this via FB. I'm already worried if my PIN # will find its way to my Facebook feed anytime soon. Let me get outta here right now and unsubscribe to the app!     

This is an excellent research paper around why, warts and all, passwords are here to stay and, despite their huge promise on paper, many alternatives haven't managed to move the needle on adoption.   

https://www.finextra.com/fullfeature.asp?id=1705

@GaryW:

Please correct me if I'm wrong: In short selling, success in delivering itself incurs potential risks of stock price going up (instead of down, as the short seller expected), whereas failure to deliver attracts penalties from the stock exchange. 

@StephenS:

We might be living in a political democracy but, when it comes to the business world, capitalism rules! To me, Main Street and Wall Street are too tightly intertwined for any clear master-servant relationship to emerge. For every SELL transaction, there is a BUY transaction, as long as the financial market supports the volume, I don't see any need to artificially keep it suppressed by real world volumes. There were homebuyers underlying subprime mortgage security. Some banks got bailed out using taxpayer funds, as were Main Street companies like GM, but many of both were also shuttered down. 

Exploiting data explosion, social media and new channels / devices will call for heavy IT investments. Given that financial services IT is driven largely by operations in most FIs, it is not surprising that CMOs find themselves incapable of turning these 21st century blips in their radar to competitive advantage and additional sources of revenues. A recent Gartner report predicts that CMOs will have a bigger IT budget than CIOs in the next 3-4 years. If and when that happens, marketing departments will be able to acquire the next level of capability. 

In all this discussion about definition of 2FA, what constitutes a puristic implementation of 2FA versus what does not, etc., it's equally important to assess what are the appropriate use cases for 2FA in the first place. Does a retail banking customer really  have to go through 2FA to know their account balance? Should a biller use 2FA to authenticate that the payor is indeed the subscriber? I could go  on with such rhetorical questions but the primary point of a transaction is that it should go through without causing undue friction for the customer, and I think this point often gets missed by overzealous security mechanisms. Some seven years after FFIEC mandated 2FA for online retail banking in the USA, the level of compliance may be low, but I have never come across any solid evidence that non 2FA users have suffered greater theft as a percentage of their transaction volumes as compared to 2FA users. 

The man on the street will always make comparisons closer to their everyday experiences. Continuing with the comparison with used car sales, it is legal for a used car dealer to strike a deal without owning the car as long as s/he commits delivery on a future date (by which time the seller is sure of sourcing it). It only becomes a crime when the seller is unable to deliver on the committed deadline. The same thing applies for short selling of stocks.